How do taxes in the financial sector affect economic outcomes? We analyze a simple general equilibrium model with financial intermediation. We formalize a trade-off between tax policies that burden the owners of banks and tax policies that burden households. We also study the implications of the...

According to Adam Smith (1790), human selfishness can be restrained by introspection. We test the effect of introspection on people’s willingness to cooperate in a public good game. Drawing on the concept of identity utility (George A. Akerlof and Rachel E. Kranton, 2000), we show...

Mechanism design theory strongly relies on the concept of Nash equilibrium. However, studies of experimental games show that Nash equilibria are rarely played and that subjects may be thinking only a finite number of iterations. We study one of the most influential benchmarks of mechanism design...

This study identifies commonalities between two historical incidents of debt assumption – in the United States in 1791 and in present-day Europe. By comparing the interests and behaviour of key players in these two incidents, we find three major parallels: First, in their strategic...

Both in the US and in Europe, antitrust authorities prohibit merger not only if the merged entity, in and of itself, is no longer sufficiently controlled by competition. The authorities also intervene if, post merger, the market structure has changed such that "tacit collusion" or "coordinated...

The paper examines the potential of customary international law to protect global public goods. In particular, it focuses on the question whether customary law can contribute to the mitigation of climate change. The analysis proceeds in the three steps. First, it will have a closer look at the...

We study how upward communication – from workers to managers – about individual efforts affects the effectiveness of gift exchange as a contract-enforcement device for work teams. Our findings suggest that the use of such self-assessments can be detrimental to workers’ performance. In the...

In a laboratory experiment, I test whether guilt aversion, i.e., a preference to fulfill other people’s expectations, plays out stronger if agents are socially close. I induce two different group identities among participants. They play a dictator game. Dictators either play with a recipient...

This paper studies collusion in one-shot auctions, where a buyer can bribe his competitors into lowering their bids. We modify the single-unit Vickrey auction to incite deviations from the designated-winner scenario and thus undermine collusion. The construction of mechanism does not require the...

The paper discusses the prospects for European Banking Union as they appear in the summer of 2014. The first part gives an overview over the problems that gave rise to the Banking Union initiative, the second part discusses the legislative measures that have been taken towards this objective....